The current account as a dynamic portfolio choice problem
By: Tatiana Didier, Alexandre Lowenkron.
Contributors: Lowenkron, Alexandre.; World Bank.
Series: Policy research working paper -- 4861; Policy research working papers (Online) -- 4861.
Publisher: World Bank
Published: 2009
Place of publication: [Washington, D.C
Language: eng
Format: Electronic resource
Subjects: Portfolio management; Balance of payments
Description: "The current account can be understood as the outcome of investment decisions made by domestic and foreign investors.  These decisions can be decomposed into a portfolio rebalancing and a portfolio growth component.  This paper provides empirical evidence of the importance of portfolio rebalancing for the dynamics of the current account.  The authors evaluate the predictions of a partial-equilibrium model of the current account with dynamic portfolio choices, in which portfolio rebalancing is driven by changes in investment opportunities.  Using data for the United States and Japan, the authors find evidence supporting innovations in investment opportunities as an important mechanism to explain international capital flows. "--World Bank web site.
Notes: Title from PDF file as viewed on 5/8/2009.

Includes bibliographical references.

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Mode of access: World Wide Web.